An economic and financial analyst, Mr David Ibidapo, says the amount spent on importation of textiles and garments into Nigeria can fund more than half of the nation’s budget deficit.

He told the News Agency of Nigeria on Sunday in Abuja that it was commendable that the Central Bank of Nigeria placed access to foreign exchange for all forms of textile materials on the forex restriction list.

The CBN Governor, Mr Godwin Emefiele, had on Tuesday said Nigeria currently spent above $4bn annually on imported textiles and ready-made clothing.

Ibidapo also noted that the restriction would reduce pressure on forex and inspire local production of textiles for both local and international consumption.

“This is a good initiative by the CBN because if you look at what we spend on importation, it is about 50 per cent of our budget deficit and imagine if that amount is being generated internally, it will automatically impact on our Gross Domestic Product.

“This will also inspire local production of textiles with the single digit rate the CBN is promising local textile industries that are interested in getting loans.

“It will also lessen pressure on forex as demand for it to import these textiles into the country pressures down the value of the naira against the dollar,” said the expert.

According to him, it is high time the nation controlled the levels of goods imported as too much dependence on importation is killing local industries due to unhealthy competition with foreign goods.

Ibidapo added that considering Nigeria’s rising population, it served as a very good investment hub for foreign investors and companies because of the very ready market it had waiting to buy the goods.

“However, once we begin to ban some items that we have the capacity to produce then this same rising population will purchase what we are locally producing and the sectors will begin to contribute significantly to the GDP.

“The only way we can alleviate poverty is to grow the economy at an average of 10 per cent every year and we are still struggling to do two per cent.

“So, we need to continue in the direction the CBN has toed and it is also good that loans will be given to the textile industry value chain at a single digit interest rate,” he said.

Ibidapo said that in the long run, it would boost the country’s GDP and create employment.

This, he said, was because when the factories began to boom, there would be more employment which would translate into income that would be circulated in the economy to achieve the needed growth.

He, however, said that achieving growth through such initiatives was solely dependent on the government willingness to be committed to the policy and ensure it clamped down on smugglers.

“I think we can achieve the desired result only if the government can really reduce the activities of smugglers and make the process of getting loans for the textile industry not too complex.

“Professionalism and specialisation will also improve, the government should be committed to the policies and in making it work; it is very achievable.

“If they can replicate this in other sectors and try to boost production of the items we import in our country, we will produce for the country and also export as demand for these products will increase and with that, the value of our currency will begin to appreciate,” Ibidapo explained.

In 2015, the CBN restricted the availability of foreign exchange to the importation of 41 items which could be competitively produced within the economy and the list has increased over time.